The FSCA has confirmed what members of United African Stokvel (UAS) came to realise more than a year ago – the promise of high-interest payouts was nothing more than a mirage.
The FSCA’s investigation into the digital stokvel and its co-founders, Darren and Shirley Langbein, began in June last year. In a statement today, the FSCA announced the completion of its probe.
The investigation found that the Langbeins solicited and collected funds from the public with promises of unrealistic returns. However, contrary to their claims, none of the funds were invested.
“The investigated parties misappropriated a substantial amount of the funds collected for their personal benefit, and the rest of the funds were used to pay some of the investors as ‘returns’,” the FSCA stated.
The FSCA has shared its investigation report with the South African Police Service, the Prudential Authority, and the National Consumer Commission “due to the nature of the findings made during the investigation”.
The FSCA launched its investigation into UAS after receiving a whistle-blower’s report and multiple complaints from clients who claimed they had not received their promised returns. In some instances, these “returns” were said to be as much as double the member’s original investment.
On 15 June 2023, the FSCA conducted a search-and-seizure operation at UAS’s premises in Bryanston. The following month, the Authority issued a public warning, urging caution when engaging in any financial services-related activities with UAS.
Read: FSCA investigating stokvel following tip-off from a whistleblower
At the time, the FSCA stated that it suspected UAS of conducting unauthorised business, breaching financial sector laws, and operating without proper authorisation as a financial services provider.
According to UAS’s social media accounts, the digital stokvel claimed to invest client funds in property and telecommunications, with returns from these investments allegedly used to pay members. However, the FSCA has found no evidence to support these claims.
‘The digital savings stokvel for everyone’
Launched on 1 March 2019, UAS marketed itself as “the digital savings stokvel for everyone”. Darren Langbein recounted in a 29 June 2022 article in Stokvel Talk how UAS emerged after a career setback forced him to pivot from buying, renovating, and reselling distressed properties.
Sharing the stokvel’s journey from “a tough start to big rewards”, Langbein highlighted what he believed set UAS apart. “Unlike traditional stokvels,” he told Stokvel Talk, “you can sign up and join us whenever you want because we’re all about convenience. We’ve got this angle where if it’s your birthday tomorrow, start saving today, then next year, the day before your birthday, we’re going to pay you out.”
However, the promises made by UAS unravelled as investigations began. The online publication Stokvel Talk, which had previously featured UAS, distanced itself in follow-up articles published on 12 June and 22 July 2023. It stated it felt compelled to address “the unfortunate situation” involving UAS.
Promotions such as those seen in a November/December 2022 Spot-On magazine Q&A article amplified UAS’s allure. One advertisement invited readers to “join the digital revolution” by saving between R500 and R50 000 a month for a fixed term of 6 to 12 months, earning interest compounded at 4% a month.
Other promotions included the “Followers Special,” promising to double a once-off investment of R1 000 to R50 000 within 12 months, and the “Upside-Down Special,” which claimed rewards of 7% monthly for 12 months on savings between R5 000 and R100 000, with the initial deposit paid out in month 13.
In the Spot-On interview, Langbein stated that UAS had “more than 15 000 members and [was] growing daily”. By the time the FSCA publicly flagged its concerns, UAS’s Facebook page boasted about 97 000 followers.
However, determining how many actual members remained when the scheme collapsed six months later is difficult, as are the losses incurred by its members, but it is safe to say they are probably in the millions of rands.
A search of UAS’s Facebook page shows the stokvel tried to reassure members they would receive their funds for some months before the FSCA’s warning.
In a Facebook post in May 2023, it blamed the backlog on loadshedding, unexpected back-up failures, and delays in receiving funds from its investment accounts.
A post on UAS’s Facebook page, dated 7 June 2023, read: “We do understand that the delays are worrisome”, and “we are continuing to make payments on a daily basis and will continue to do so every day”.
This post has since been removed.
In the email sent in August 2023, UAS said it wanted to bring it to members’ attention that the company had “in the past few weeks been engaged with the financial services authorities to answer the questions of legal compliance and that has resulted with Nedbank, who is the company’s bankers, suspending the banking systems of the company and disruptions for normal activities”.
The email said the “mentioned issue” was receiving the urgent attention of its legal advisers, “who are engaging both the authorities and the bankers”. The message concluded by saying the company would report back to members “any progress and developments in due course”.
Disgruntled UAS members have since voiced their outrage and despair on several WhatsApp groups in the face of UAS’s protracted silence. One was specifically created for members who want to (and can afford to) pursue legal action.
Read: Anger, despair, and hope – stokvel members respond to email urging patience
UAS was placed under provisional liquidation on 13 October 2023 by the High Court in Durban, with a final liquidation order set for 20 December 2023. Disgruntled UAS members have continued to voice their outrage and despair on several WhatsApp groups, but with little to no response from both the liquidators and UAS.
Moonstone recently spoke to one of the affected members, who lost R200 000. The member, who requested anonymity, said that to her knowledge, no updates had been received from Darren Langbein.
“Members in the group were furiously trying to reach out to him,” she said.
The member also expressed frustration with the slow pace of the legal proceedings.
“When we ask for updates [from the liquidators], we get nothing back. Some members then call their offices directly and are told to stop calling as the case is still pending and they will let us know,” she added.
Another member, who also asked not to be named, confirmed that she too has had no feedback from the liquidators as to how the search for all available funds or assets belonging to UAS was progressing.
The member, who lost R500 000, says the last communication she received from UAS was after the FSCA sent out their public warning.
“I sent an email asking if they have anything to say against the allegations. They answered, saying, no the company is just facing difficulties, and their lawyers are taking it seriously and will get back to us, and after that no reply.”
She said it has been a difficult experience for her family. “I really took a knock. It was irresponsible of me. I got retrenched and invested all of it in the stokvel, hoping I was making the right decision. But I didn’t do the right research. There were lots of people saying how they got their payouts. It has been really heartbreaking.”
